Check Fraud

It is important that all businesses accepting checks, especially in these trying economic times, establish an effective check policy for both customers and employees. Employees who are properly trained in check acceptance policies will help protect from bad check losses. It is a good idea to have check acceptance policies easily accessible to cashiers, clerks, and others responsible for accepting checks. Customers of businesses with established and conspicuously displayed check acceptance policies will feel they are being dealt with fairly if all customers are dealt with in a consistent manner.

Below are some guidelines for accepting checks, and what to do if you are the victim of check fraud.

Identification

Failure to obtain proper identification is the most common reason why bad check cases are found to be non-prosecutable. CheckAll forms of I.D. can be forged. Therefore, it is important to view identification in terms of "acceptable risk."

To minimize this problem, require at least one primary I.D., preferably backed by at least one secondary I.D. It is vitally important to compare the photo and physical description on the primary I.D. card to the person writing the check.

Primary I.D.'s are: (must have a laminated photo and always check for alterations)

A. Is the check dated with today's date? Pre- or post-dated checks cannot be prosecuted and should be cause for suspicion.

B. Is the signature legible? Was it signed in your presence? Do not accept checks that have been previously signed. The signature must be made in the presence of the person accepting the check and should match the writer's photo I.D. In the case of company checks, it is vital that the signature is legible. If not, print the individual's name on the front of the check.

C. Is the check written on a new account? Approximately 85% of all bad checks are written on accounts only a few months old and bearing check numbers between 101 and 150. Use caution - possibly verify funds with the bank for large amounts. Do not accept counter-drafts. Only accept checks with the name and address imprinted on them.

D. Do written amounts and numbers correspond? Banks will not honor checks with discrepancies between written amounts and numbers.

E. Is the address complete? Require a street address in addition to a P.O. Box number. Ask "What is your current address?" Request home and/or work telephone numbers.

F. Can you confirm the identity of the check writer? Compare and record primary and secondary I.D. information (see Section I). Record the information on the front of the check to avoid the possibility of bank processing stamps covering important information. Record the birthdate, address, phone numbers, driver's license number or any other pertinent information.

G. Did the person accepting the check initial the check? Identify the person who accepted the check as that person will be a necessary witness in the event of a criminal case.

Important Points

A. Use common sense. If in doubt, call the bank and verify that the check is good before accepting it.

B. Be doubly cautious on weekends and holidays.

C. Do not permit yourself to become flustered by the shopper who is in a rush - be courteous, but be careful.

D. Consider accepting only local checks. A bad check drawn on an out-of-state bank may have an adverse effect on collection and prosecution efforts.

E. Do not accept two-or-more party checks.

F. Do not accept checks with alterations.

G. Once in place, DO NOT MAKE EXCEPTIONS TO YOUR POLICY AND PROCEDURES.